Behavioural Economics: Psychology and Economics

This course is an introduction to a fast-expanding field of economics, Psychology and Economics or as it is often referred to, Behavioural Economics. It is not an easy field to define, but those who sympathize with it tend to share the belief that economists should aspire to making assumptions about humans that are as realistic as possible, and hence that we should develop methods and habits of mind to learn what is psychologically realistic. Hence, a lot of work in the field is based on evidence that economists tend to ignore: evidence based on experiments, asking people stuff, and looking at the work of psychologists and other scientists. I will describe some of this research in this course.

The field, however, is not a fundamentally different way of doing economics. In this course, just like in any other second year economics course, we will be attempting to think precisely (and often formally) about what might be driving a particular behaviour or economic outcome, and about how to carefully test our hypotheses. By the nature of this field, a lot of work is based on evidence from experiments, asking people stuff, and looking at the work of psychologists and other scientists.